LPS focuses on accelerating preparations for insurance policy guarantee scheme

Makassar (ANTARA) – The Deposit Insurance Corporation (LPS) is focusing on accelerating preparations for an insurance policy guarantee programme so that it can be implemented effectively.

KM Nuruddin, LPS Executive Director for Secretariat and Institutional Relations, said in Makassar, South Sulawesi, on Tuesday that, under current regulations, the programme is scheduled to begin on 1 January 2028.

Nevertheless, LPS is seeking to speed up preparations so that the programme can operate more effectively and sustainably.

Nuruddin explained that LPS is preparing supporting infrastructure and technical rules for the programme. It is also monitoring the financial health of insurance companies that may eventually take part.

He estimated that around 150 insurance companies could be eligible to join the programme.

However, he stressed that participating companies would need sound finances and governance. Improving the health of the insurance industry is therefore an important step before the programme is launched.

“We don’t want companies to join LPS and then suddenly leave LPS with nothing to do but pay their claims. We hope the insurance companies joining the programme will first be in good health,” he said at the Leading Indonesian Financial Literacy (Like It) public lecture at Baruga AP Pettarani, Hasanuddin University, Makassar.

He said he hoped the policy guarantee programme would protect policyholders while encouraging growth in the insurance industry.

It could also help restore public confidence in the sector, particularly amid various problems with claims payments.

“As we know, the insurance industry is currently experiencing something of a crisis of confidence, particularly when it comes to finding new products or policies, because there have been many cases in which policyholders have found it difficult to make claims,” he said.